You’re at the beginning of your startup journey, you’ve been listening to colleagues and friends complaining about the same problem and you’ve decided that this is your startup opportunity.
Starting up a company is hard work. There are a thousands of things that need to be done and as a founder you’re sometimes expected to be the product developer, marketer, sales person and designer, all at the same time. But how do you develop a solution that your customers want? Before you start building anything you should start with customer development.
So, what is customer development?
Customer development is talking to your customers about their problems to then decide on what the best solution is. It’s the process that will help you start shaping your startup’s business model. On top of that, it’ll benefit your marketing, sales and product strategy. Not bad, huh?
I’ve meet a lot of startups that don’t know their customers at all. They assume a lot of things about them but they never actually tested if these assumption are true or not. In this first post I’ll introduce Steve Blank‘s framework of testing hypothesis and provide tools that can help you structure your cust dev better.
How to Develop Your Startup Idea
1. Test assumption you have about your idea
Same way as you research the purchase of a new phone or computer you should research your customers. Assumptions that you’ve set up are often not accurate to the real world. You can almost alway assume that your customers will think and act differently from how you assume them to think and act.
By making your assumptions into hypothesis you can plan and conduct experiments that gives you more insight to your customers needs and wants (more on testing will come in the next blog post). Below is the customer development cycle you can use to structure your process around.
Figure 1: Steve Blank’s customer development cycle
2. Use a Kanban to track your progress and insight
To support the customer development cycle you can use tools such as the Kanban board. It will help you track your learning and insight. Personally I use trello.com as it is a free open source application that you also can download as an mobile app. LeanCamp has written a great blog post about how to use Kanban. It can help yourself and your team to work together when testing assumptions and designing experiments.
Figure 2: Trello.com screenshot
3. Business Model Canvas
A way that can help you specify assumptions is to map them on Alexander Osterwalder’s business model canvas. You can also use the same tool to map your iterations and changes.
The business model canvas helps startups clearly define customer segments, the relationships they want to build with them and the channels the customer can be reached through. The canvas also helps to outline the envisioned value proposition for customers, potential partners and key activities and resources that are needed to keep the company going.
Figure 3: Business Model Canvas
Great business model canvas tools can be found here:
Before you decide that your startup opportunity is the right one, make sure you test your assumptions around the problem as well as the solution. Document your findings on a business model canvas and stick to a framework to get the most our of the customer development process. Remember your success can depend on it as you’re not the judge whether your idea will make it in the market or not, but your customers are.
In the next few posts I’ll give you further insight to how customer development…:
- > …is learning by observing
- > …takes you to the AHA solution
- > …speeds up your sales and marketing process
- > …makes your product the HERO for your customers